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Press Release

02 May 2019

Interest rates on hold as Bank lifts growth forecasts

The Bank of England (BoE) has today (2nd May 2019) kept UK interest rates at 0.75% as it raised its forecasts for the UK.

 James Rowbury, Investment Research Coordinator, Redmayne Bentley, said: “The Bank’s Monetary Policy Committee (MPC) signalled during its May meeting that it remains on course to raise rates on the back of an improved outlook for the UK economy.

“The MPC has revised its expectation for growth this year from 1.2% to 1.5% as well as strengthening its growth forecast for 2021 to 2.1%. The committee is concerned that if current forecasts are accurate, a one quarter-point interest rate rise over the next three years would lead to the economy running too hot, as the degree of excess demand would be greater than previously anticipated.

“Governor Mark Carney stressed that if forecasts do come to pass, rate rises will be required more frequently than financial markets currently expect. However, its policy stance still appears to be uncertain as the committee reiterated previous guidance that any further rate rises would take place “at a gradual pace and to a limited extent”. Whatever the course of action is over the next three years, the committee appears in no rush to raise interest rates from their current level as they voted unanimously to do nothing at this moment in time.”

Ends

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Interest rates on hold as Bank lifts growth forecasts
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